Clean Claim Rate

November 25, 2021

clean claim rate

Being in an IT department of a hospital, you might have come across a terminology of “clean claim rate”. But what is a clean claim rate? It is a rate at which clean and successful insurance claims have been processed and compensated for it. Note that it counts for the first time when these claims were made. Clean Claim Rate (CCR) is a key component in revenue cycle management for any hospital. The cycle of the claim starts from the provider to the claim scrubber, the clearinghouse, and later to the payer (insurance company or the patient).

 

What is a medical claim? 

A medical claim is a critical part of medical billing. It is a document that is submitted to a health insurance provider company (also known as the payer) by the healthcare provider. These claims include the codes that help describe the healthcare service or procedure that was provided to the patient. These medical services can be any of the following:

          Medical procedure

          Diagnosis

          Prescriptions

          Medical supplies

          Medical equipment

          Transportation

          And other medical devices used during the service.

 

Working of a medical claim:

But how does the medical claim work? Here’s how the services being provided by the medical practice are converted into codes after an encounter with the patient. These codes help reduce the inconsistencies that arrive in a lengthy description by the practitioner of the administrative services. With these codes, the insurance provider (payer) can identify what services were provided in order to determine whether they cover the patient. Note that, these codes don’t specify the charge of medical service, the healthcare provider can charge for a particular service according to them, the decision is solely theirs to make. This is why for every coded service, the medical claim should include the practice’s charges.

After a medical claim has been made, review and double-check the complete file for errors, run them through the claim scrubbers. Checking for errors is important as without it, inaccurate claims can be submitted resulting in denials.

 

What should a medical claim include?

In a medical claim, the patient information is under two parts. One is the claim header, two are the claim details.

The Claim Header:

This part of the medical claim includes the most essential yet confidential information of the patient.

Patient information might include:

          Date of birth

          Gender

          Zip code

Claim header also includes:

          NPI – National Provider Identifier (for the attending medical healthcare provider and service facility.

          The primary diagnosis codes

          DRG – Diagnosis Related Group

          Name of the insurance company (the payer) for the patient

          Complete charges for the claim being made

 

The Claim Detail:

This part of the claim includes the secondary information of diagnosis and procedures provided. The claim details should include the following:

          Date the service was administered

          Procedure & diagnosis codes

          NDC – National Drug Code (if applicable)

          Charges for the services being provided.

 

What is a Clean Claim?

Medical billings play a vital role in the functioning of a hospital and timely payments. This involves various steps to ensure a smooth revenue cycle and improve overall medical care. Medical billing involves three parties, one the patient themselves, second, the medical healthcare provider, and the insurance payer (third-party). Medical billing is directly connected with reimbursements and compensation focusing on two types of claims. One of which includes, Clean Claim.

Requirements for a Clean Claim:

A clean claim in medical billing terminology identifies that claim that has no defects and contains all the substantial documentation. This complete documentation results in no issues hence timely payments and no denials. A clean claim requires various elements for the documentation to be completed. Those elements include the following:

            The documentation must identify the healthcare provider, the facility medical services were provided in, and the durable healthcare equipment provider. If necessary, under the circumstances, identification should also be included.

            The claim should be submitted by a licensed medical healthcare provider.

            Address and ID of the payer should be identified correctly.

            Patient and the healthcare subscriber identified in the documentation

            Detailed list of location, time, and date when the service was provided.

            Detailed list of all the healthcare services provided to the eligible patient.

          Under the circumstances, documentation on the necessity of the medical service provided to the patient.

    The documentation must identify that the procedure and coding rendered were done through the generally-recognized and accepted methodology.

        In case the insurer asks for any additional information, the documents should be attached to the files.

          Procedure codes along with their diagnosis code (not expired or deleted) 

How do clean claims impact the healthcare organization?

A healthcare organization’s smooth functionality depends on revenue cycle management. And the revenue cycle directly depends on the in-time payments. Now in order to get timely payments, a healthcare organization has to submit clean claims (claims with no errors and complete documentation) to the insurers. A clean claim can be processed without any additional documentation or information required. But obviously, for a clean claim, there are some requirements (mentioned above).

Yes, submitting, tracking, and monitoring claims can be difficult but it is necessary for timely payments, no claim denials, and a smooth healthcare revenue cycle. But sometimes, claims can be rejected. Here is a primary reason why a claim can be rejected.

Why are claims rejected?

The third-party insurers (private or government) have their strict rule book, and often they make changes according to the regulations to accommodate any changes. There are a couple of reasons behind a claim rejection.

  1.       Inappropriate patient care by the healthcare provider
  2.       Incomplete documentation or late submission of the documents for the claim
  3.       Overlapping date and time of service.
  4.       Expensive treatments or treatment with preapproved drug claims
  5.       Inadequate documentation for the claim being submitted.
  6.       Claim with no pre-certification forms.

 

Most importantly, incomplete and inaccurate claims don’t just delay payments but can also result in some legal trouble. With too many inaccurately submitted claims, the healthcare organization can also be flagged and it can result in huge fines.

A Strong Clean Claim Rate:

The medical practices must have a 95% of clean claim rate. In the first time a claim is submitted, most medical practices receive 75% and 85% of the clean claim rate. This means only 25 percent of them are rejected or denied claims. These claims can be denied due to incomplete documentation or errors in the submitted claim. Clean claim rates (under 95%) should not be satisfactory, most importantly under 90%. Keeping the clean claim rate high can increase the ratio of clean claims and result in profitable business.

How to calculate a clean claim rate?

Clean claim rate can be calculated by dividing the claims (with no manual intervention) that have passed all the edits, by the total number of accepted claims (that have been accepted into claims processing tools for medical billing). There are a number of ways that can help increase the clean claim rates to improve your revenue cycle, fewer denials, and timely payments. Following are the four ways to increase your clean claim rate:

            Medical Billing Partner

            Claim Scrubbing

            Medical Billing Software

            Education and Training

 

  1.   Medical Billing Partner:

For the overall efficacy and successful medical billing practice of revenue cycle management (RCM), building and maintaining a clean claim rate is the critical part. Now partnering with an RCM for medical billing can result in various advantages. Some of them include:

            Medical staff can focus on other patient-related critical tasks

    A party (RCM vendor) that reviews the claims for errors and check the documentation before the claim is submitted.

      Necessary steps are taken to ensure the clean claim rate stays above 90% by the professional and experienced medical billing practitioner.

  1.       Claim Scrubbing:

Claim denials usually happen due to either incomplete documentation, errors, or late submission. Partnering with an experienced RCM vendor identifies the errors made in the claims before being submitted. And it ensures the mistakes are resolved quickly before submission, An RCM vendor has resources to stay up to date about the payer’s rules and regulations (changes if any). With all that, the RCM vendor ensures the claims don’t get rejected for not meeting all the payer requirements. The healthcare providers can be at ease after partnering with a medical coding professional with peace of mind that their clean claim rate will not drop. 

  1.       Medical Billing Software:

There are many ways for ensuring a clean claim rate stays above 90% and the best way to do that is to implement medical billing software in your practice. A number of medical billing software exist, helping providers with claim submissions, identifying errors in codes, and helping with authorizations prior to the submission. Medical billing software from quality RCM vendors have claim scrubbing and clearinghouse edits incorporated in their software. These two factors help identify the mistakes, make the necessary changes and lastly for reimbursement, submit the claim to the payer.

  1.   Education and Training:

The healthcare staff involved in revenue cycle management (RCM) directly or indirectly, should be trained and educated regarding the importance of a high clean claim rate.

Training points should include:

            Significance of clean claims

            Common errors made in the claim submission

            Importance of complete and accurate documentation

            A proper plan to improve the overall revenue cycle.

Training by the medical billing partners and medical billing software vendor should be given to the medical staff. Along with a quality RCM vendor, an educated staff’s input and the medical billing partner’s efforts improve the clean claim rate even more.

Tips for Achieving 95% of Clean Claim Rate:

As mentioned earlier, achieving a 95% clean claim rate is critical for a smooth revenue cycle for any healthcare organization. But how do you achieve a 95% of the clean claim rate? Following are some of the tips for achieving a 95% of clean claim rate:

  1.     Updated Patient Information.

The claim includes every last detail required of the patient, from contact details to the insurance payers including any other additional details. Incomplete or inaccurate patient information can result in denied claims. To be sure, confirm the patient’s current information and update the file before the service has been received. To avoid any delays, and help the patient verify the data in advance, precisely document everything.

  1.     Verify the eligibility of the patient before the date of service.

Regular or already established patients are the one’s staff assumes would have had no recent changes to their insurance. Outdated insurance information leads to denial in most claims. Collect, confirm and verify patient’s every insurance information (from primary to tertiary) in order to reach and maintain 95% of clean claim rate. This verification should be done at least 5 days before the scheduled service.

  1.     Complete documentation of patient’s medical information

The most detailed medical information of the patient leads to higher clean claim rates. The medical documentation must include, procedure (detailed) documentation, medical history of the patient, medications used previously, and any other similar medical information. In case of processing the claims, this detailed medical information can be used as a supplemental record.

  1.     Keep an eye on the claim submission deadlines

The claims need to submit in time and they offer a very tight window of submission. This means, if the claims are not submitted in the timeline provided, it can lead to denials. In order to keep a higher clean claim ratio, keep an eye on the deadline to submit a claim. Review, identify and resolve any issues related to the claim before the submission date. The best way is to process and verify the information, a minimum of three to five days before the date of service.

  1.     Review the modifier used again:

Use of the wrong modifiers can result in denials and late payments. Double-check the modifier/s used for the claims in medical billing. Verify that the right modifier was used on the right procedure. For ensuring that the modifier was used correctly for the right procedure, create customized NCCI (National Correct Coding Initiative) guidelines.

For a clean claim rate achieving 100% is not considered practical. But 95% have already been achieved by practicing the right medical insurance billing. By using the right medical billing practices, you can easily avoid errors, maintain a clean claim rate and avoid claim denials. For more details visit our website UControlbilling.com

You May Also Like…

0 Comments

Submit a Comment

Your email address will not be published. Required fields are marked *

Ready To Get Started?

Pin It on Pinterest